RETAIL CHOICE AND RESIDENTIAL CUSTOMERS

Bill Malcolm – Senior Legislative Representative, State Advocacy and Integration , AARP John Erlingheuser – Advocacy and Outreach Director, AARP Connecticut

A presentation to the Governor’s Committee on Energy Choice – Consumer Protection Workgroup

Las Vegas, Nevada

February 8, 2018

About AARP

AARP, with its nearly 38 million members, is a nonprofit, nonpartisan organization that helps people turn their goals and dreams into real possibilities, strengthens communities and fights for the issues that matter most to families such as healthcare, employment and income security, retirement planning, affordable utilities, and protection from financial abuse.

Learn more at www.aarp.org.

Our utility positions• Support fair and affordable rates• Oppose mandatory demand

charges, increased customer charges

• Question subsidies, surcharges, etc.

• States that have retail choice should enhance consumer protections

• States that don’t have deregulation should not pursue it

Retail choice: What worked• Retail residential rates in Illinois are the lowest

in the Midwest for the first time in 40 years• No over building of generation and

transmission in Illinois compared with Wisconsin which saw rates soar

History of Electric Restructuring• 1990s: Deregulation works in other industries, particularly natural gas. High cost states look to it to

lower electric rates. Spin off of generation transfers risk from consumers. • 1996: AB 1890 (CA) opens California market to retail competition• 1999: 24 states restructured. Most spinning off generation. Michigan was the last state to do so. Most

states allow a utility default service (except Texas). • 2000: FERC Order 2000 establishes voluntary RTOs although does not mandate footprints. • 2000: Enron market manipulation in California causes blackouts. State ends restructuring. Other

states like MT follow. • 2008: MI limits retail choice to 10% of load. • 2011: California law passed allowing community aggregation.• 2016: IL nuke owner gets $230 million in annual subsidy for Quad Cities and Byron • 2017: NY PSC grants nukes $9 billion in subsidy • 2017: GA and SC face $9B each in nuclear power plant construction woes. • 2018: Florida considers ballot measure• 2018: NJ, PA, & CT debate single state out of market subsidies. DOE pushes FERC to subsidize

nukes and coal with subsidies as well. FERC declines. PJM proposes letting coal and nuke set market clearing price.

• Currently 12 states allow restructuring (most high costs NE states but also including IL, TX). No state has decided via a ballot measure nor as a constitutional amendment.

What hasn’t worked• Administrative costs for marketing to residential

very high• No savings from switching in many states• Hard to compare offers• Misleading marketing by rogue marketers• High exit fees• Automatically switched to a variable rate• Misrepresentation of programs• No link to smart meter or time of use rate• Lack of PSC enforcement capability when

something goes wrong

New York (15-M-0127)• PSC banned marketer sales to low income

customers• PSC opened a docket to consider if retail

choice is saving customers money• Marketers claim “apples to oranges” • Utilities largely silent on the case• Customers who switched suppliers are over

paying compared when compared with utility default service

Illinois (15-0512)• Over 200 communities went to community

aggregation • New rules governing marketer practices

developed after complaints• Utility default rate currently hard to beat• ICC issues new marketing rules• ICC convenes a marketer stakeholder group

The Connecticut Experience

Connecticut passed An Act Concerning Electric Restructuring – Public Act No. 98-28 in 1998.

The Connecticut ExperienceThe market transition stalled!

The legislature steps in again.

In 2007 Public Act 07-242 was enacted into law.

The Connecticut Experience

Reining in the supply market.

In 2011 Public Act 11-80 was enacted into law.

The Connecticut Experience

In 2013 Suppliers React!

The energy auction (eliminate standard offer service)

The Connecticut Experience

The Polar vortex and the Ratepayers bill of rights!

http://www.nbcconnecticut.com/investigations/PURA-Investigates-Spiking-Electric-Rates-246069331.html

Connecticut Consumer Protections• Right to full disclosure• Right to cancel your contract within 72 hours• Right to stay with standard service• Cancellation fee cap of $50• Option to return to Standard Service within 72 hours or on

next meter read date• Compliance with Do-Not-Call-Laws• Right to raise concerns with PURA• Ban on Variable rate contracts

Connecticut On Bill Consumer Protections

Connecticut On Bill Consumer Protections

Connecticut’s Official Rate boardConnecticut’s Official Rate board

Where is retail choice now?

• Retail suppliers serve 27.3% of Eversource Energy (Eversource) residential customers and 34% of United Illuminating (UI) residential customers, in September 2017.

• In the month of September 2017, over 5 out of 10 residential supplier customers paid more than the Standard Offer in Eversource territory, and 8 out of 10 residential supplier customers paid more than the Standard Offer in UI territory.

Connecticut’s Official Rate board

https://www.energizect.com/Or call

1-877-WISE USE (877-947-3873)

The Don’ts of Choosing a Supplier

• Don’t sign up for service from door to door or telephone solicitations

• Don’t share your Eversource or UI account number with people on the phone or who come to your door

• Don’t sign up for a 3rd party supplier through a direct mail solicitation or a through a knock off website

• Don’t feel pressured to sign up with a 3rd party electric supplier

The Do’s of Choosing a Supplier

• Do go to the state’s official rate board before considering a switch to a 3rd party supplier

• Do monitor your electric bill details every month even if you do not switch suppliers

• Do write your contracts expiration date on your calendar or input it on your device

• Do be sure to get a written contract from your supplier with all of the terms associated with the offer you selected

Helpful Tips To Consider

• Avoid offers that have enrollment fees• Remember 750 kilowatt hours per month• Remember the months that the 3rd party contract

covers• Avoid fixed tiered contracts• Only make decisions about 3rd party suppliers at:

www.energizect.comor by calling 1-877-WISE USE (877-947-3873)

For further information• AARP.org/Policy Book (see Chapter 10)• Bgold@aarp.org • Wmalcolm@aarp.org• Jerlingheuser@aarp.org v. 7 2/4